Comptroller Kevin Lembo, in a letter to the state Department of Insurance (DOI)
this week, urged an open and thorough review of a proposed merger between Anthem
and Cigna in order to address significant concerns raised by health care
consumers and providers.

Lembo, as the administrator of the state’s largest health plan, covering over
200,000 members, expressed his support for a recent request by the Connecticut
Campaign for Consumer Choice to ensure that the DOI’s review of the proposed
merger adequately accounts for the concerns raised by those most affected by the
merger.

A merger between Anthem and Cigna would increase the Connecticut health
insurance concentration over 40 percent, Lembo reported, noting that only
Georgia is expected to experience a more significant increase in market
concentration.

"Studies have shown that concentration in the fully insured commercial market
can lead to higher fully insured premiums for consumers," Lembo said.
"Significant market concentration has also been associated with lower provider
reimbursement rates. As the administrator of a self-insured health plan, I
welcome the potential for lower prices for health services – however, in certain
instances, the lower reimbursement rates negotiated by a dominant insurer in a
market may result in a reduction in access to care provided by physicians.

"Additionally, the significant increase in negotiating leverage achieved by a
combined Anthem and Cigna entity in their relationship with providers in the
state could spur additional provider consolidation. Increased provider
consolidation would offset the potential for lower health care prices associated
with the Anthem and Cigna merger and reduce consumer choice. The potential for
these issues to manifest themselves in response to an Anthem and Cigna merger in
the Connecticut health insurance market must be fully evaluated."

Specifically, Lembo is requesting that DOI accept the recommendations of the
Connecticut Campaign for Consumer Choice to:

• Require that the public hearing be held at a venue and time that allows for
maximum public participation.
• Grant interested parties intervener status to allow for an adequate review of
the proposed merger.
• Commission a study that will analyze the potential impact on cost, access and
quality.

"Holding public hearings at times and locations that are easily accessible to
the public will ensure that consumers and providers that have specific concerns
about the proposed merger can be heard and their views considered as a part of
the review of the proposed merger. Specifically, I am requesting that the DOI
hold hearings at an easily accessible location with free public parking, outside
of the 9-to-5 work day."

Lembo explained the importance of granting intervener status to both consumer
and provider groups with a significant stake in the outcome of the proposed
merger – and the need for an independent analysis of how the merger will impact
the state economy.

"Consumers and providers have raised reasonable concerns about the impact of the
proposed Anthem and Cigna merger," Lembo said. "Allowing these parties to have
intervener status will allow them to call and cross examine witnesses.

"Finally, a complete and in-depth analysis on the potential impact on cost,
access, quality and the Connecticut economy should be performed as a part of the
review of the merger. The analysis should be performed by an independent party
with the analytic capacity to review the diverse potential impacts."

Lembo said he is not, at this point, advocating that the DOI deny or approve the
proposed Anthem and Cigna merger – but simply urges an open, inclusive and
thorough review.

"It is important that the evaluation of the merger give equal weight to any
potential negative impacts it may pose on cost, access and quality of care. The
outcome of the merger will have a significant impact on the health care market
in Connecticut for many years in the future. It is essential that the evaluation
of the impact of the merger on cost, access and quality of care incorporate the
voices of all interested parties."